anna: you are watching bloomberg politics u.k. elections 2015. welcome to bloomberg politics. u.k. elections 2015 live from bloomberg's european headquarters in london. i'm anna edwards. david cameron is set to remain prime minister of the united kingdom after the general election according to exit polls. we will be live in downing street. labour hammering in scotland as
nationalists surge. the snp is on track to become the third largest party in parliament. we are live in glasgow. sterling rallies against all major counterparts and surges to a six-year high against the euro. we bring you the latest market reaction. now let's get some details behind those stories. david cameron is set to stay in downing street as the prime minister of the u.k. exit polls show conservatives will head with either a minority or a working majority vote. >> this is clearly a very strong night for the conservative party. i think we've had a positive response to a positive campaign about safeguarding our economy and creating jobs.
above all, a plan for the next five years. those who do the best should find the system on their side. anna: the labour party has failed to gain key seats in england and scotland as the nationalists surge. the snp is set to become the third biggest party in parliament. >> what we are looking at tonight is a very historic shift in opinions in scotland. we said that snp mp's were elected to make scotland votes and that is what we will do. anna: bloomberg will bring you the latest on the election results from across the u.k. and beyond as well. ryan chilcote is at 10 downing street am of the home of the u.k. prime minister. mackenzie is in gaza, tracking
the snp story. elliott gotkine joins us from westminster. manus cranny will be watching stocks for the open at 8:00 london time. we are not done with the u.k. election results, but the picture seems to be clearing up for us. let's head straight to downing street and ryan chilcote. good morning to give your big it good news for david cameron even if it is too early to call. ryan: that is absolutely correct. whether he leaves with an absolute majority or has to form a minority government one thing is actually clear. david cameron is set to remain prime minister of this country and remain here at 10 downing street. the conservative party is delighted. there are those that will say "i told you so," that there was
going to be this reversion to support for the conservative party, to the incumbent government because the conservatives had been leading this country well but they are clearly delighted. this is the first time that an incumbent government has seen an increase in its mandate with a follow-up election. perhaps that's the reason why they just came out of 10 downing street to gave the reporters coffee, not something they do every day. we've already heard from the leader of the labour party, ed miliband, giving what sounded a lot like a concession speech, very graciously saying that he has heard the people. we also heard from the leader of the liberal democrats, nick clegg, saying that it had been a cruel night for his party effectively conceding defeat. they were the coalition partners
with the prime minister's conservative party. going forward, what we are waiting for is for david cameron to go ahead and use his right if you will, to form a government in this country, or attempt to form a government in this country. absolute euphoria here at 10 downing street. anna: is it unequivocal victory for the conservatives? david cameron is not ready to call it just yet. just yesterday, we were talking about whether the conservatives would pull together a coalition and now we seem to be talking about why they might break through with some quasi-majority. maybe 325 seats. an amazing turnaround. ryan: absolutely. they are very happy about that. but they are also very aware of
two big issues they have to deal with as the prime minister returns for another five years. he has reasserted his promise to carry out a referendum on the u.k.'s membership to the european union by the end of 2017 something he reluctantly agreed to in the lead up to this election. and then, they are concerned about the support that the scottish national party got. will they keep this government together? ed miliband mentioned that at this point, the issue for this country is that there is much less that divides them then keeps them together, a clear reference that it is going to be difficult to keep scotland on board in the next five years. as a responsible party you hope
would be, they are also aware that the challenges are extraordinary for the conservative party. anna: thank you very much. david cameron saying they need to deliver on the promise to scotland. the scottish story very much at the center of this. with those scottish comments by david cameron, what at historic victory for the scottish nationalists. they lost a referendum last year. let's go live to guys go -- to glasgow and tom mckenzie. what does the victory in scotland mean? the leader of the scottish party losing his seat along with many others. tom: it has been an absolutely massive victory for the scottish nationalist party. it has been a white out for labor. this is a historic moment in scottish politics.
the hold that labor had over scotland has been wiped out. the polls may have been off for the rest of the u.k., but in scotland, they are dead on. the message the scottish nationalist party has been driving anti-austerity, and nationalism. those elements combine into a potent force here. we are still waiting for a few more results. there have already been some big beasts for the snp today, the labor shadow secretary has gone to a 20-year-old politics student. then there's the leader of scottish labor. there is danny alexander, a big name in the liberal democrat party. charles kennedy, former leader of the liberal democrats, has fallen. labor taking the biggest hit here. the liberals also suffering. this is a momentous occasion.
there is so much energy in the snp camp. they may not be getting the ideal circumstances. they want to have a loose agreement with labor. that doesn't look like it is going to happen. but they are going to westminster with a lot of energy and confidence. anna: what does this mean for nicola sturgeon, the leader of the snp? she only took over after the referendum in september. what will it mean for their newfound power in westminster? they are without the partners they had hoped for. tom: in some ways their power is slightly dented, but it is not holding them back. a few key messages they will be pushing, one is anti-austerity. they want more taxes on high earning individuals, bankers those kinds of things. they want more spending on nhs
more spending overall. a lot of those things may not get done. but they will want to chip away at some of those. they have the scottish parliamentary elections to look forward to. they want to show the scottish people that they have made real progress. then, this eu referendum that we are likely to get in britain in 2017. if britain decides to vote to exit the european union, then nicola sturgeon, the first minister, has said she would then consider a second referendum. they only want to do that if they know they can win it. they can't lose two referendums in a row. that is a big question now as we head to what looks like a cameron-led coalition of some form. anna: tom mackenzie live on the ground in glasgow. it is shaping up to be a very
difficult night for labor. the party has high-profile defeats at the hands of the s&p in scotland, with scottish labor leader jim murphy and shadow secretary douglas alexander both failing to hold their seats. the labor leader, ed miliband, apologizing to party members who lost their seats in scotland. >> the results are still coming in, but this has been a disappointing and difficult night for the labour party. we haven't made the gains we wanted -- and in scotland we've seen a surge of nationalism overwhelm our party. i want to say to all the dedicated and decent colleagues in scotland who lost their seats that i am deeply sorry for what has happened. i also want to say that the next government has a huge responsibility facing the very difficult task of keeping our
country together. whatever party we come from, if we believe in the united kingdom we should stand up for people in every part of our united kingdom. [applause] because, you know, i believe what unites us is much, much more than what divides us. i'm now going to go to london to await the full results to come through. i just want to reiterate my thanks. it is a huge privilege to be a member of parliament. it is a huge privilege for you to have placed your trust in me. anna: ed miliband, the later of the labour party. he is talking about the need to hold the united kingdom together. let's go live to elliott gotkine. where does labor go from here?
al: that -- elliott: that is a very intriguing question. you would assume that if there is any attempt to have another referendum that he would fall into line with the conservative party and others in trying to ensure that the union stays together. one should note that traditionally, the labour party has been less inclined to defend a straight its leaders -- defen estrate its leaders than the conservatives. what ed miliband was saying, was we haven't made headway in england and wales. if the scottish nationalists managed to embed themselves north of the border, these low hanging fruit of seats that labor could always rely on to help them get a majority in the house of parliament, if they can't rely on that, they have to get bigger in england and wales.
that hasn't happened this time around. i suppose questions will be asked as to whether they can do so in the future. it has certainly been a very tough night for them. ed miliband said it was a very disappointing night. prime minister david cameron said it was a very strong night for them. both of those outcomes confounding the opinion polls, which projected a much closer race. anna: nothing like the opinion polls. thank you, elliott gotkine. now let's focus in on the markets. sterling is rallying against all major counterparts surging to a six-year high against the euro. let's get straight to manus cranny. manus: i think there is one way to sum up what the pound is doing. it is on a tear. have a look at all the major crosses of sterling.
dollar-sterling rising the most since 2009. sterling rising against the aussie dollar. dollar-sterling trades at 1.5514. sterling-yen of the most in six months. we are on a tear. the best line i've seen is from hsbc. i want to show you volatility. this is a fascinating chart. we are seeing volatility drop. the scudder -- the scottish referendum, will they, won't they, volatility in sterling peak the way above that. today, sterling volatility is dropping. the likes of blackrock and citigroup weren't investing. the market was not that convinced on sterling. now as it stands, a line coming
through from rbs saying, perhaps you've seen the best of these moves. there was a bit of a resurgence. could the tories have a 325 seat westminster? what would that do to sterling? what would that do to the risks? we've moved on. how will markets interpret the propensity of the tories to bring an eu exit to the floor and to the country? i want to show you the equity markets. the ftse is up 100 points at the moment. this is the historic ftse. we've had the best election year since 1987 on the ftse 100. let's look at the ftse 100 longer-term chart. the cost of hedging was the highest against europe since 2013. if you want to understand the propensity of a tory government coming back in it is the 250.
typically after the election the ftse 250 rises by 18%. we are looking at the markets repeating history. the ftse 250 is the much broader index. typically it rises 18% after the election. the ftse is up 100 points when it comes to the industry groups to be concerned or perhaps to be excited about, it is the banks. insurers are going to come under pressure. the ability to put money into your pension is going to come under pressure. utilities, a little relief rally. why, because labor had promised price caps. the most shorted stocks out there, let's see how they opened.
circle lansdowne, those are the big names out there at 8:00 a.m. there are other parts of the world. look at this. three other issues on the agenda, china exports are down substantially more than the market anticipated down by over 6%. we will also see nonfarm payrolls in the united states. we are looking for numbers to come through from that. and there is a deal. it doesn't get more exciting than that. i will leave you with that, a $45 billion merger. anna sterling is on a tear. ftse is 100 torrance higher. we will be watching the industries and the market reactions. anna: i can rely on you to pollute the politics show with other news. thank you very much. we will be back with manus for the latest news on currencies and stock markets. for more on the results we have
so far and how they stack up against the exit polls that were forecasting 316 seats for the conservatives, and perhaps to answer a few questions about what the polling industry did well and badly, let's head to nejra at the touchscreen. nejra: there have been a lot of surprises tonight. i want to give you the big picture of how these results came in through the night. look at all those colors. i want to particularly draw your attention to scotland, and to the scottish national party. you can see it flashing yellow. basically, an annihilated labor in those seats. if we get back to the main board , look at the results, you can see that the conservatives lead at the moment in terms of seats. you can see the number of seats that the snp has.
you got 106 seats remaining. the magic number for that majority is 326. again, a little more detail on how this has been out. i've got tom joining me. i want to start with the latest polls suggesting the conservatives could be on course to win 325 seats, labor just 232. is this a surprise? >> it is a surprise. we were predicting the firm -- the conservatives would form the largest party. it is the difference between conservatives and labor which is much greater than we were estimating. nejra: this 325 number is effectively a majority. 326 is the mathematical number they need to reach, but there are parties in northern ireland that don't take their seats.
the majority could be more like 321. tom: they would need all the parties against the conservatives to basically block any policies coming through. anything above 320, the conservatives are probably in a strong enough position that david cameron can form a majority government. nejra: why is it that we have such a wide gap between conservatives and labor? tom: i'm not sure we got it so wrong. i think there's an interesting dynamic taking place in this election. the two party democracy which we've been used to, i think this is the end of it. the rise of a number of edge parties, ukip being one example but particularly the scottish national party is very much impacting it.
keep in mind that in the last election, the snp had six mp's. they've got 55 already. they might gain one more. most of those have been taken from the labour party. they've had a large distance to make up. nejra: is it also because a lot of voters were undecided? tom: yes. we had 20% of people saying they were definitely going to vote but were still undecided. we know from previous experience that they often revert back to the safety of the incumbents. i think the conservatives benefited from that. nejra: certainly have benefited so far. we've still got more to come. back to you for now. anna: thank you very much.
now, you are looking at a live picture of westminster, london. just waking up to what has been very surprising news. the conservative party coming through with a much stronger performance than had been expected. that is addington green. there's the house of parliament from a different angle. the bbc now suggesting that 325 seats could go to the tories. david cameron looks set to remain as prime minister. could the results put britain one step closer to an exit from the eu? let's talk to adrian. thank you. you've already told me you have at least two hours. that makes you very well-qualified to be here. how surprised are you? >> i'm just as surprised as everybody else. it maybe didn't come quite out of the blue.
it is normal that the incumbent government gets a swing from undecided voters. the conservatives have been saying this was going to happen from the beginning. they were waiting for this moment. the surprising thing is the complete collapse of the liberal democrats. the complete collapse of labor in scotland was expected, but the sheer scale of it. also, in almost all tory-labor marginals, they gained or held. anna: ed miliband and david cameron chose their victory speeches in their constituencies to talk about pulling the union together. both of these parties very mindful that when you look at a map of the united kingdom, scotland looks like a very different place. it is represented almost
entirely by snp mp's. what is their focus going to be? will it have to go further? adrian: i think it probably will have to go further. it is very interesting that cameron should focus on that now. other senior figures like boris johnson have been talking about how they will have to come up with some sort of new settlement. some have hinted at a new federal structure. we are not quite there yet. on the one hand, the fact that the conservatives now have, look like they will have, an effective majority, gives them more freedom to approach this question not so much in a party political way which they have been guilty of in the past, promoting english votes for english laws. they can now maybe try to work with the snp and take a broader view. while the snp wants to leave the
u.k. the vote for them is not just a vote for independence. it is a vote for a stronger vote for scotland. anna: what about the europe question? the latest polling i've seen around whether the u.k. wants to stay in europe suggests that ukip -- people in the u.k. do. where do we go now? adrian: they do by a brief margin. the question is asked in the way that cameron wanted it to be asked. do you want to stay in the eu assuming that we have renegotiated our relationship with the union? a much bigger majority want to stay in. the question is what kind of negotiation can cameron get? anna: difficult to say. thank you very much, adrian rogstad. you are looking at live pictures now of 10 downing street. david cameron is set to stay on
anna: will it be the warnings about the snp and labor? >> i think -- they have read drawn the scotland's political map. david cameron has hammered through that message. that seems to have worked. we had a lot of games from them in unexpected seats. the latest forecast shows in at 325 which is not a majority but just short of it. anna: for the people just waking up, the latest exit polls showing possibly 325 seats for the conservative party. the polling showing 270 and 280.
325 might not be technically a majority but when you take out the speakers and the deputy speakers, this is what we call a working majority? svenja: not quite. david cameron will also be at the mercy of the rebels and his own party. there will be something like the eu referendum which will be up the top of the list for him to push through. there are some seats left to declare but for now it is the best result they could have expected. anna: jimmy renard just joins us. a tough night for you but also because you find your industry on the defensive. so many people on twitter and the studio sank why were the polls not telling us we would see such a strong performance? jamie: if we look at the overall
picture the expectation was for conservatives being the biggest party. and that initial exit poll which was a bit of a surprise, it was evidently very much spot on. it is true the conservatives have done better than expectations but something we should not forget is that there is a huge change in british politics. . we have a arise in ukip. a number of the spots on the border are spot on. but this morning for people switching on it is something markedly different to expectations. anna: you think back just some months ago and you were talking about ukip and whether that would be a big poll and in terms of votes share they might not have done too badly but in terms of seats we have yet to hear about nigel farage they have
not done all that spectacularly well but from a polling perspective i was reading that some people think it is how you treat people who say they vote ukip that might have thrown them off. is that true? jimmy: there are several things at -- jamie:. what it demonstrates is that in u.k. politics it is all about how concentrated your vote. anna: am a no point of a lot of support if it is spread out. jamie: that is what happened to ukip and that is why in the popular share they would do well. there are lots of seats where they become the challenger. but as you hinted in your initial question, one of the things we have seen is that ukip was a phenomenon that stole supporters from labor and conservatives and the evidence is those who were more conservative beforehand have gone home and have returned to
support the conservatives and ditch their support for ukip. anna: will the polling be doing anything different tomorrow? jamie: we have a changing and fragmented british political system. we'll get through this evening and this morning but there will be a lot about how to better model it going forward. anna: let's have a look at some of the top stories this morning. the world's largest seed company made up $45 billion offer to their rival. they are said to have rejected the offer which would represent a 35% premium on its last closing price. we had more evidence overnight of china's economic slowdown. exports unexpectedly declined in
april. imports slid by 16.1% for eighth double-digit decline. the most globally watched numbers is due out today. u.s. nonfarm payrolls is expected to show that the world's largest economy added 230,000 jobs. that follows an increase of 126,000 in march. this billionaire attracted investors from singapore, canada and the united arab emirates to fund hutchinson's 7.5 billion pound 02 activation and create the world's largest wireless carrier. they have agreed to pay a combined 2.8 alien pounds. back to the politics, david cameron looks set to remain as the u.k. prime minister in this morning he reiterated his price for a referendum on the
membership of the eu. cameron: we should never duck the big issues whether dealing with our big issues or holding a referendum which we were right to hold on the future of scotland or the future the referendum we must hold to decide britain's future in europe. anna: let's get an investor take on all of this and the fallout in the market heard joining us now is michael o'sullivan. welcome to you michael on this amazing morning for u.k. politics. how does this translate into your view of the investment world we have the u.k. economy given your overall thoughts. >> on the u.k. economy, i think it is is this as usual. people have to a large extent kept calm and carried on and they want a continuation of the higher growth and job creation we have seen. so what we don't have is a disruption of that pattern.
in terms of markets, if you're a traitor and pushing trading actions, you probably want to do some u.k. small stocks and some of the domestic oriented stocks and utilities and some of the banks who may have suffered in the labor government scenario. and then the context of the selloff we have seen they begin to look attractive on a valuation basis of 2%. the big issue that investors will talk about, outside the u.k. would be the possibility of an eu referendum. but the pound has rallied. it is focusing more on the u.k. economy prospect of rate increases. and i would say for david cameron, one of the things that will go through his mind is not genetic to when john major one a
surprising victory and was very quickly caught up in the eurozone crisis and his own party. anna: political parallels to 1982 and it ones. how long until your turns the corner from being caught up in a free market euphoria following a conservative victory and start focusing instead on the risk to the u.k. growth story surrounding european membership? >> a lot of this depends on how to stage of actors in u.k. all takes has changed. a lot of the established faces is gone and we are still not sure if nigel farage will take a seat. back in 1992 am a david cameron has real power. 325 seats which is where he is headed. he is beyond his wildest dreams of yesterday evening. so he has power and i think he
has to use that to a certain zone within the party. he is tough on the eu but stays on the eu type platform. anna: you've mentioned the movers with seen in the fixed income markets in the past weeks. of course there are different crosscurrents affecting the guilt market but as a result there is a global guilt story and questions about whether inflation is coming back and that has to bump up against the u.k. political story so where does that take the guilt market? >> we have been under that for the last couple of months and maybe the first month has been quite difficult because bundesbank push to absurd political level so we are quite pleased to see the selloff and a sense of fundamentals reassert themselves. in the u.k. with the tory
government we are pretty clear on fiscal policy and monetary holocene with a rate increase toward the end of the year. i think that sets the stage for a bit of opportunity in guilt. anna: had to international investors look at this. do you think they will look at continuity as the conclusion and say i will continue to put money in the u.k.? or will they think twice because of all the attention we have seen? >> i think international investors will scratch their heads at scotland. an amazing win for the s and p. completely dominant. there is a game of thrones aspect of one end of the country being upset at the other one. anna: when you look at the electoral map scotland looks like a different country.
>> it looks like an independent country in the sense of the elect oral map areas there is the prospect of tensions between the north and the south but generally speaking investors will be pleased with this and will regard this as continuity and i think the risk that a labor lead government would opposed to market are beginning to evaporate. anna: utility company's breathing outside relief? >> this is perhaps the only sector that sold off in advance of the election on the prospect of a labor victory. anna: thank you very much for joining us. michael o'sullivan the chief investment -- david cameron tweeting a happy picture with his wife after conservatives are set to remain in power. here is the latest count. conservatives 319 and labor have
198. many more counts to come in but it does seem as if the conservative party remains in charge. the nationalist victory in scotland, the landslide has already made history. the youngest member, a 20-year-old glasgow university policy student. we will get the latest on the scottish story after a short break.
anna: welcome back to "bloomberg politics." things moving fast here on the u.k. election in the latest numbers suggest that based on 450 declarations the conservatives could take 329 out of the 650 seats available. remember that a majority is 326. so if they release -- if they reach that that would be a majority for the conservative party. not something any of the pollsters were predicting and when you consider there are a number of speakers the majority starts to look a little bit bigger for the conservatives than that number would reject.
in the meantime, one of the big stories has been that strength of the snp overnight. let's get back to scotland where tom mckenzie is joint. tom: before i bring in the doctor, let me give you a quick update. 56 seats for the s&p. out of the possible 59, 1 apiece for the lib dems, tories and labour party. it is a huge and momentous political shift and who better to talk to about it then dr. murray, from the university of the west of scotland. somewhat of a specialist. it is a card that the snp have played. what has driven the rise in nationalism? >> scotland has always been very trout of being a nation and the
scots have always been very nationalist. if you go back to last time they achieved over 50% chair was the conservative party in the 19 50's and the language they employed was very nationalistic in a language is very proud and strong and this idea of a scottish light in is nothing new. >> it is about the scots having a stronger voice or is it because they are coming around to the idea that maybe independence is the way to go after all? >> even though that was defeated we are 45% in favor of it and if you go back to the 40 -- 2011 scottish parliament election the snp received 45% of the vote there. nicklas sturgeon was very careful to see that this election was not about nationalism and because of the collapse of the lib dem vote.
that seems to be shifting toward the snp. and the other big difference is over the last proceeding decade the scottish electorate attended a vote one way in westminster and another way for hollywood that seems to have changed. x so given that what does the future look like fort labour. talking to the activists and candidates on the ground this morning they were so utterly disheartened and despondent and didn't have on young answer of where to go. >> we have one mp in scotland. for them, they still received 27.9 percent of the votes cast in scotland and at the election next year. the thing that saved them is the proportional nature of the scottish parliament and they will end up with a significant number of mp's. for that 28%. but they can only go up from here.
you could lose all your mps but i would doubt -- although i would've doubted the result today. but i don't doubt they will have a new leader and i don't doubt they will possibly have a new leader at the united kingdom level and have to sit back and say why aren't people listening to us more than this 28% to tom: what is your take on whether another referendum is on the cause. >> it will be difficult to turn around and say we want a referendum because they absolutely ruled it out for this election. scotland's only legally constitutionally binding referendum needs the government. tom: is the nationalism we're seeing likely to trigger nationalism in england? >> it could be that what we are seeing is the beginnings of a stirring of english nationalism. obviously there is you can't in
some argue that is driven by a sense of english nationalism. but there is also the sound of certainly a nationalist party around yorkshire who would argue that are not necessarily nationalist but regionalist. there is no doubt that there has been a bit of backlash in terms of what is perceived as ankle he -- anti-english. there are even accusations leveled at the prime minister that he was using language not befitting of someone in the conservative unionist party. >> some have said that the dramatic win that we have seen is actually damaging for democracy in scotland. is that something you would take on board? >> there is no doubt them when one party has an overwhelming majority it tends to not leave any room for the other parties but of course have significantly wider representation in parliament. but they have significant
representation in westminster from other parts of the u.k.. what is important is that perhaps it is time for the united kingdom to revisit the voting system and have a greater sensibility when people cast their votes. >> dr. marie from the university of the west of scotland giving his analysis. on that i will hand it back from a wet glasgow. anna: thank you. tom mckenzie in glasgow. these are live pictures of david cameron making his way to downing street. i wonder if when he left he expected he would ever be back for a long period of time. it seems as if he will return and if the polling is to be believed. that the conservative party will have done much better than any of the polls before the election suggested. these are the scenes as we
crisscross london following the conservative party around. let's talk about what the future for britain looks like with alan crawford. it seems we are facing to bump big x essential questions this morning. one is around the union and whether the u.k. can hold together and the other is the u.k. role in europe. all of these big questions being highlighted by the election results. >> on the one hand, david cameron is looking like he could have a majority. he has no fractious coalition to worry about, but at the same time he still has a large number of back ventures who will insist he follows through on his pledge of holding a referendum on the britain membership in the eu and that is hard to see as not
dominating the political agenda until the vote is held. whether he sticks to his original plan to hold it or the end of 2017 or whether he comes under such pressure to bring it to -- bring it forward. scotland is the other issue that is hard to see reconciliation between david cameron's rhetoric on the risks posed by the nationalists and the reality that 56 scottish nationalist mps are returning to westminster. anna: it seems surprising that they both chose victory speeches at their constituency entries to talk about the scottish question and in david cameron's case he said he was illuminating the need for the promised devolution to be incremented. but when you look at a map of scotland entirely dominated by the scottish nationalist party. it will be an incredibly loud
scottish voice in westminster, one that will be difficult for the conservatives to resist. >> alex famously send -- said he wanted to return a large number to hold cameron's feet to the fire in terms of delivering these pledges. but in some sense it is secondary. the s and p have the ultimate goal of independence, not greater powers for scotland. so with the delivery of an eu referendum there is some potential mechanism whereby scotland could vote against. nobody knows how this would work but there is the potential under a cameron government which would not exist under a labour government. anna: i suppose the cameron story and the eu story come together in hollywood in 2016 because if we do see an eu
referendum that could be something that changes the game significantly. >> definitely. the perceived wisdom, whether it is true or not is that the voters in scotland are far less eurosceptic then in england. that is certainly what the snp is banking on. they have said they would not recognize an eu referendum that delivered a no vote, potentially with ukip support without some separate sense of what is happening in scotland. anna: thank you very much for joining us. alan crawford from bloomberg news. you are looking at live pictures coming to us. we are tracking the movement of the political parties across london. ryan chilcote is on downing street and we will hear from him at the top of the next hour.
anna: welcome to "bloomberg politics," life from the european headquarters in london. let's get some headlines. sterling rallies against all of its major counterparts and searches to a six-year high. it eases concern that drawn out negotiations will be needed to form the next government. david cameron is set to remain
prime minister with an effective majority after pulling off a surprise election victory. labour takes a hammering in scotland as analysts serve in an historic victory north of the border and the s&p is on track to become the third largest party. we're live in glasgow and westminster. let's get more details. the pound has surged against the dollar and the euro since 2009. exit polls suggest that the conservatives are on track to form a majority government. after winning the most seats in the u.k. general election. >> this is clearly a strong night for the conservative party. i think we have had a positive response to a positive campaign about safeguarding our economy and creating jobs. but a record in the last five years and a plan for the next
five years, based on clear values. i want to reward those who work in our country and that they should find the system on their side. >> the labour party has failed to gain key target seats and lost seats across scotland as it nationalists searched. there's -- the snp is set to become the third largest party in parliament. >> what we are looking at tonight is a very historic shift in opinion. we said during the campaign that snp mp's would be elected to make the scottish voice heard and that is what we intended to do. >> here at bloomberg, we will continue to bring you the latest on election results from across the u.k. and beyond. ryan chilcote is that downing street. tom mckenzie is in glasgow
tracking the rise of the snp. elliott joins us in westminster. and we are the results as they come in. let's head straight to downing street and join ryan chilcote. it looks like good news for david cameron, even if we -- he has not acknowledged it yet. ryan: whether they get a conservative majority are whether david ends up ruling a minority government or they get to work at an ad hoc vote by vote acis it is perfectly clear that david cameron will remain prime minister and will remain here at downing street. that will be his residence for at least another five years and the people here are absolutely delighted with that result. some will say that we told you so but the reality is that this
is a huge surprise and maybe even a shock for the party itself. they got many more votes than they expected, more votes than in 2010 when they came into power and it is the first time in 30 years that an incumbent government has come back with more of a mandate than they had in the previous term. it has also been a huge loss for the labour party, ed miliband effectively making a concession speech earlier. they got far fewer votes than they were hoping to get an far fewer than they got five years ago and the liberal democratic party and the coalition partners of the prime minister suffered a huge defeat. their leader, nick clegg spoke a short while ago and he calls it a crude and punishing night. he was heckled eaves and -- even as he won his seat by some members of the audience. they are delighted with the
result and it is quite clear that david cameron is going to be able to go it alone leading this government without coalition partners. anna: just to add to the conservative party's story, george osborne holding his seat and just crossing the bloomberg terminal now. that is the chancellor here in the u.k. concerning his position in the conservative party as a member of parliament. it was shipping up to be a difficult night and it has been for labour and the leadership acknowledging that. the party already suffered high-profile defeat at the hands of the snp with scottish neighbor leader jim murphy and the foreign secretary jim alexander murphy both failing to hold onto their seats. we will just bring you some live pictures of george osborne, you can see him acknowledging his success.
>> i also of course think the people of the constituency for once again putting their trust in me. i never forget that i go to parliament with a primary responsibility which is to represent the people of the constituency and i will not forget that. i remember standing on this stage five years ago and i made a commitment to work with people to turn britain around. we made great progress. tonight, the british people have asked us to finish the job and that is what we will now set about doing. to make sure we have a country that lives within their means. that would have an economy that works for everyone in the united kingdom. to bring that united kingdom together. to make sure that we have a
relationship with europe and a particular passion of mine to build a northern powerhouse here in the north of england. we had historic results tonight. anna: george osborne who was the chancellor under the last parliament talking in cheshire higher in the northwest of england are you he had represented that constituency since 2001. once again, talking about the importance of holding the union together. that is something that david cameron talked about earlier as well. after retaining his seat in jon tester north, ed miliband apologize to his party members who lost their seats in scotland. we don't have the sound, but we do have elliott. elliott is live in westminster and can fill us in on what ed miliband was saying that it was a disappointing and difficult
night. >> it was and while it was a difficult night for the labour party it was a strong night for the conservatives. i am joined by the foreign minister from the outgoing government and inside the future government. thank you for joining us and for being patient. a good night for you guys, how did it all go so right? >> it is not over yet but based on the predictions we are seeing it doesn't look like we have confounded the pollsters and are certainly going to be the largest party. we'll have to wait and see whether we will have a clear majority are whether we will be just shy but it is a good night for the conservative party and a bad night for labour. >> when push came to shove people just thought that the economy is growing again better to stick with the people that we know rather than risk a new government? >> that has been our consistent message. we have a plan for dealing with
the many problems we inherited and that problem is beginning to deliver. we haven't finished the job. we have more work to do and the message we are getting from britain is that people understand that and they want us to finish the job and put britain back on track and make sure we're able to compete and remain secure and strong. >> does this mean we are guaranteed to have an in out referendum of britain's mentorship in the -- eu as promised? >> it looks as though david cameron will be the prime minister and he has made very clear that he will only be prime minister of an government committed to an in out referendum. >> when it comes around, the conservative party as a whole will be pushing to remain within the union? x we made clear that we will
first of all renegotiate the relationship. that is a process that will take us a year or longer and then we will go to the british people and present that package and they will make up their minds. knowing there would be costs in terms of jobs and markets and looking at the package we renegotiated and deciding whether britain's future is inside the european union or outside. >> where do you personally stand? >> i believe that we will be able to get a package. lots of people are skeptical but i believe we will be able to get a package which will meet many of the demands of the british people and will surprise people. our partners in europe want us to stay and they do understand the strength of feeling on some of these issues. they know they will have to offer us something if we will be able to make britain's future in the european union. >> perhaps the prime minister will face the suspect --
prospect of scotland being a foreign country. with the surge of the snp and conservatism -- and the surge in labour being wiped out, are we likely to have another referendum and the next parliament, can you say now if we would or wouldn't? >> first of all, we had one seat conservatives had one seat in scotland in the last parliament and it looks like we will have one seat in parliament in this -- referendum we had last year was central to the question of scotland's future and the scottish people very wisely decided to make their future inside the united kingdom. but the unionist parties said then that we were prepared to give more power to the scottish government and more power to scotland to run its own affairs inside the united kingdom and the message from the snp is that we now need to move quickly on with that agenda to give the
scottish people more power to run their own affairs. >> thank you so much for joining us. congratulations on what looks to be a good result for the conservative party and the government. for now, i will head in the studio. anna: elliott, live from westminster areas we are looking at live pictures coming through all morning of the various party that is getting themselves in the right place to face the rest of their friday. david cameron is making his way across london and heading for the tory party headquarters we are told right now. not far from marble arch at the moment and then he will be heading to downing street. the conservative party hq and will apparently be his first stop. we are just getting another forecast coming through this
morning in terms of where we see the number of seats going and the bbc projections echoed the of other projections we saw early on. u.k. conservative party set to retain 320 nine seats. the importance of that number would mean that would be a majority. not a big one but it would be a conservative party majority. not something that any of us in the political watching world thought we might see at this stage of the game. now, 13 minutes past 7:00. let's talk a little bit about how the markets have been reacting. stirling is rallying against all of its major counterparts. let's get straight to manus who had reactions across the market to a very unexpected political outcome. >> is those polls are to be
believed, 320 nine would be a victory for cameron and the government beyond his wildest dreams and that would mean him effectively carrying through a lot of the economic policies that he and osborne put into place. it is the pound that one it areas the pound having its best day since 2009. rbs singh perhaps you have seen the best of the run at stirling. the aussie dollar up the most since 2011. i would to show you some volatility charts because this is when you begin to understand that the fx traders who were betting that it would drop are bang on the money. one week volatility in stirling has literally plummeted. these are the currencies to reflect upon. off the highs of the day. the euro just taking a basting
against the pound. let's look at the volatility. london indicated to open up over one and a half percent in london. keeping an eye on the banks and utilities. utilities free from the specter of price caps. the long government bond market these are features prices up on the guilt. i spoke to john at ubs. the unexpected disappearance of uncertainty. it is critically important that you look at the bottom of that board at short-term interest rates in the u.k.. it is interesting that hasn't changed that much. you take 100 minus 99.13. rates at ubs say that the momentum will build as the consensus seems to be that there will be stability of government and the timing has the bank of
england announcing rates today. no great change expected. if you want to punt on election day and election year this is the market according to the historians. after an election. the ftse 250 rises on average by 18% in the year of an election. of course we had the best election-year rally on equity markets. 1987, the ftse 250 has risen typically bite 18%. this is what john had to say to me earlier. we get there in the end. this is a day to watch the markets. the equity markets are rallying the pound is rallying and the question is, will the markets bring forward their expectation on the ability of the bank of england to raise rates.
that has ramifications for the bank of england. back to you. anna: manus on the markets and more from him later on in the program. let's go live to glasgow. bloomberg tom mckenzie is there and updating us on what has been a phenomenal performance. tom: scottish people are waking up to a cold and wet morning. the political landscape has changed dramatically. 56 states for the s&p and that compares to 10 in 2010 and the labour party down from 40 to just one. who better to explain what has happened in this shift than a prominent member of the labour party. many ask for your patience. where did labour go wrong? >> the drama has been unfolding for about a decade. but the referendum, scotland and
the people feel empowered and they feel that we have choices and labour was overwhelmed in the election and a spectacular results for the snp. we have to look at that closely, but we haven't much time. tom: your back in charge and had the power in your hands in the labour party, what would you be saying to people as to how they rebuilt? >> we have a lot of social justice issues on our side. we cannot take people for granted. scotland is a very different place and what we have to really do is have a rethink and get the constitution sorted out so we can take on independence and go back to some of the first principles in terms of philosophy and tactical progressive politics and we have to take the snp on. with a very relevant party.
it is a tall order but unless we get down to the work immediately we will continue to get rebuffed as we did last night. tom: more of a shift for labour? >> i feel we should be a modern social democratic party. we have a lot of people desperate to vote labour but we have to stand for something and mean something to the voters. as i said, this didn't happen yesterday. there have been a lot of wake-up calls in 2011 and 2007. have not heeded them. >> how do you think things would play out for the snp when they had to westminster with 56 s -- mp's, including a 20 euro politics student. how will that work out? >> one of the problems for the leader is to manage expectations. here is the perfect storm, a possible conservative government
and the s&p sending 56 people to london. back in the an recipe for success or there can be considerable consequences. but at the end of the day labour having one seat should be the stimulus for people realizing that we have to change. >> in terms of the economic impact and the message this sends out to the rest of the world. we have this national force and we have rightly taken another step toward independence. what message does that send to people looking to invest? >> the thing that the business community fears most is uncertainty. we might face a referendum in or out of europe in 2017 but uncertainty of will the conservatives have a majority what will the s&p do and what will labour try to do in scotland. politics is not a smooth business but the community and the employment situation we
have to get back to some business as usual. tom: how much is it down to the leadership. nicola sturgeon described by the daily mail as the most dangerous woman in britain. how much does leadership come down to it. >> no doubt that nicola is a very charismatic character and had a formidable election. you cannot turn this around in a six week. lots of good policy and energy but the danger for the laser -- labour party. the soul of the labour party is at stake. >> your thoughts on the future of the union. are we that much closer to a breakup. >> i fear that we are but the danger is that means the conservatives have to treat scotland with a bit more respect and labour has to try to fight
back so we can get a solution for scotland within the union. at the end of the day if you have 56 mps worsening a big delegation to westminster. if you insult the snp with 56 states you are insulting scotland and this could have proven to have significant consequences. >> henry, the former first minister of scotland for the labour party. a prominent member of the party giving his thoughts. anna: you're looking at the live map of voting results as they come through during the u.k. election. gradually through the night this map has been populating with the results of the election. you can see that the scottish part of the map is a different color from the rest of the map and that really indicates how strong it has been from the rest of the night.
the latest projections are that 300 29 seats could go to the conservatives and that would be a majority. even a number of little bit less than that could be an effective majority. we don't know the results yet we have not seen them all. there are still 80 seats left to come through, but this is the picture as it stands right now. we haven't yet heard about a number of key individuals. we heard that jim murphy is gone and we heard about danny alexander. we haven't yet heard about ed balls. the ukip question is also a little bit open this morning. we are continuing to monitor for those latest results as they come through. let's get back to the markets. the pound has searched the most against the euro since 2009 as
cameron is set to stay at downing street. we are joined now by the ceo of hermes investment management. give us your wisdom on this unexpected result and what it means for the investment climate. >> what an amazing night for the conservatives. not since 1932 have we seen a conservative government -- incumbent government increase seats. i think the other point is that people look at scotland and i don't think they are paying enough attention, they're saying that centrist politics are no longer acceptable. the conservatives have a very clear right of center policy. the lib dems have been annihilated and i would argue that labour have been annihilated. and the scots saying we are part of the united kingdom but you have to look after our interest.
there is an element we will see between halle takes. but they still would not have one and the conservatives -- that ultimately means that we are on for a referendum. that will be interesting for the city. the one part of the united kingdom's economy that would be hurt is london. so let's hope something will happen then. anna: gordon brown and the former leader of the labour party said this week that if the conservatives were back in downing street that the s&p would be reduced to just noise. you think -- there will be 50 snp's coming to london for the first time but will they just be a noisy sideline or will they have a real influence on the outcome? we're just hearing a now have 56 out of 59 -- 56 out of 59 seats.
>> i don't think it will be just noise i think that is labour being disingenuous. we have to think slightly more holistically then people have thought before. but if you look at their policies they are more left-wing than the labour party. i'm saying it will revive the debate and this move away from centrality which we have seen over the last 10 years in politics. that might spook markets eventually but not yet. this is a recipe for stability. anna: markets seem to resort -- like this result more than we thought they might. >> i landed from a business trip last night and the paltrow saint saying 275 to 270 and by this morning there were saying 325 which is an effective majority and now 329 which is an out
right majority. anna: let's talk about brexit. the possibility of the u.k. exiting the european union. two years of and certainty hanging over this question. how dominant theme will that be in terms of investors looking at the u.k.? >> the city is the major earner for the united kingdom. if there is a brexit it cannot be a major center of europe. we've seen what happened to switzerland losing its power as an offshore banking site. i think it is bad news. >> anna: is it particularly does -- disaster for businesses that want to trade with the rest of europe. if your business is international does it matter echo >> i think it does matter because people who want to put money in the u.k. whether from the east or the united states
want to do so to step into the free market of europe and that is a huge advantage. anna: i spoke to sullivan and he was saying that international investors might be looking at the political map scratching their head in terms of the snp and it seems we are facing a couple of x essential questions about scotland and europe but hold your thoughts because we're just hearing from nicola sturgeon. >> david cameron will be the prime minister. >> our jobs is to stand up for scotland against the conservatives. i think it makes it all the more important that we do have a strong s&p to stand up for scotland. anna: nicola sturgeon, the leader of the s&p reacting to what has been an incredibly strong night for the s&p in scotland. not perhaps the result in
england that she would have wanted, at least having immediate short-term influence. we believe the end objective to one side for the moment. but we are back. do you think international investors will be confused about the u.k. echo >> if you look at the websites of most american news channels. anna: they were confused yesterday. >> they underestimate how resilient the political system is in the united kingdom. the water referendum and scotland as part of the u.k.. that might mean more of the devolution of power but it doesn't change the picture. what i think might happen is there might be more investment with northern england as a way of all string investment to take away anxiety about all the world concentrating in the south.
anna: i spoke to some people who said this is really significant. this is the treasury saying we are prepared to give up some of our control and to spread power across the u.k. and other said it is just a marketing tactic. john -- george osborne wants to be reelected. you think it is an investment scheme? >> i think they do want to try to rejuvenate and there are moves to do so. if you look at this recovery it has been lopsided. one way the conservatives will try to can -- keep consolidated is to try to appeal to people in the north of england and that means more investment. they are also bolstering against the separation of scotland in the future. anna: i suppose we might have some implications to infrastructure spending. thank you for your time this morning. the chief executive officer at hermes investment management. let's get up-to-date with some
of our top stories. monsanto has made a $45 billion initial offer to their arrival. syngenta ag is said to have rejected the offer which would have a 35% premium on its last closing price. anna: more evidence overnight of china's economic slowdown. overseas shipments fell 6.2% from one year earlier while imports slid. the most closely watched piece of economic data is due out at 1:30 p.m.. the u.s. payroll expected to show that the world's largest economy added 230,000 jobs in april following an increase in march. the smallest rise in more than one year. we just got the complete results for scotland. the snp took 56
out of 59 scottish seats. let's get to nejra at the touchscreen. nejra: just slightly fewer seats than the exit polls were saying for scotland. if we look at the u.k. as a whole we can just take a look at how the results have played out overnight. look at the populating colors the blues and reds, blue for conservative, red for labour. if you have a look at scotland you can see that big patch of yellow or they have annihilated labour. the scottish national party. if we take a closer look at the specific results you can see conservatives in the lead here. we only have 75 more seats to declare out of 650. i just spoke to tom and he said only 75 seats is game over.
will we see a majority government? >> looking very much like that if the conservatives will get enough to run a majority government without needing to agree to any arrangement or coalition. nejra: that wasn't the prediction weeks ahead of the relation -- election. we spoke to the foreign secretary earlier and he said we confounded the pollsters. should you be hanging your heads in shame. >> i don't think so, i think we got quite a lot of it right. the s&p surge in the minds of liberal democrats was something we identified early on. it is interesting that the movement between labour and conservatives is not that much. what is happening with the new dynamic of the end of the two party system, it is the interactions between your liberal democrats and ukip
taking votes from labour. it is an interesting one which i think possibly no one picked up the intricacy of that dynamic. i think that -- >> certainly the white house of labour and scotland is something you were -- wipe out of labour in scotland is something you were predicting. will that completely change the political map? when we have the scottish referendum the root talks where if it were a yes vote it would be difficult for labour in future elections to ever form a majority. what is the outlook? >> the momentum has been very much behind the scottish national party for a number of years. different for this one, people changed their votes. they have done it this time as a reaction to perhaps a position to the westminster elite.
it was a protest against that it also based on the credibility of the scottish national party that built up over time. so what is very interesting now they have this conservative -- and serve it up government with one mp in scotland so what is the situation? they came out on a very strong anti-conservative road. so they are not going to combine. you have two nations. >> one interesting thing you were talking to me about his this is almost the ideal outcome, why is that? >> that is one scenario. in a position of power with 56 mp's but there will not be any deal with the conservative government so it is a case of making demands to pull the nation together and if they don't get them to have a very convenient excuse to blame the conservatives that they are stalling the anti-austerity
policies which nicola sturgeon has been pushing the whole of the campaign. it is an interesting potential conflict. >> reflate, will you change your approach to polling given the surprises? >> not within the scottish context because we got that one bang on the nail. but the u.k. will be up for review. there will be a review as to what impact the changes may have on polling going forward. nejra: change certainly the key word here and a lot of surprise with just 72 seats to go we will be watching the rest of them as we go ahead. >> a change from what the polls suggested. thank you very much. the pound has surged the most against the dollar and the euro since 2009. let's get more with john, the
former bank of england deputy governor. thank you for coming in. let's start with your general reaction. in terms of the implications for the u.k. economy. >> this is a good night for conservatives. they have done better than i hoped. they are still talking about a narrow majority and i think initially there will be relief in the markets. no great change of policy business as usual. george osborne and david cameron will be at the center of the new government just as they were the old. giving it a few weeks i think people will begin to think yes but with a narrow majority, they will perhaps have to be more attentive than the last five years to their back benches and particularly their eurosceptic back benches and i think we will start talking obsessively about
the euro referendum and a possible brexit. anna: do you think this government will be more eurosceptic than the last one? >> yes. in the short term this is a great boost for david cameron. anna: just looking at pictures of david cameron coming to downing street. he has been at conservative party headquarters and is now arriving in downing street. but you were saying, do you think it will be a more eurosceptic government? >> yes. he is likely to have a majority that is workable with a divided opposition. but he will have a party which is determined to press ahead to a referendum. and as we found with scotland they are difficult things to manage. >> there he is writing with his wife, back at the house that perhaps they were not sure they
would see for much longer but that appears to be where he will preside. he famously said he does not want to serve a third term so if he does become prime minister very quickly questions will turn to how long he will stay at the helm. for the moment that is a conversation for another day because we do not have the full results right now. but it does look as if the conservative hardy has retained power. we hope to go back to downing street in just a moment. ryan chilcote on the ground in downing street is standing by for us. let's talk briefly about the implications for interest rates. -- let's hold that thought and get to ryan in downing street. watching david cameron returning to the house he might not see again. brian: an extraordinary moment and a moment the press has been waiting for there are 50 journalists here and a dozen
television cameras. a moment the press has been waiting for for many hours. hugely symbolic in this country for the prime minister to return the day after elections to downing street. it is a way of i'm still prime minister and back as clearly the polls and the results indicate that he is. he is with the bbc forecasting that the conservative party will get an outright majority. he wasn't saying anything i asked him if it was a good morning and he just smiled. took a little bit more time than he normally does to pose for the press in front of that front door but clearly, he isn't prepared to say he has won the election just yet. many speculating that he wants a genuine concession speech from
ed miliband the leader of the labour party before he really lays out his plan and stakes out his claim to form a new government. which, by all accounts could be a majority government. they are really delighted here at downing street with the results of last night. the got a lot more votes than anyone was anticipating and they are the first party in this country in three decades to return to power with more of a mandate than they had when they went in. a really extraordinary result. they are being very careful whether it is david cameron walking in and not saying anything to the press or whether it is george osborne that we heard from they are not being triumphant. clearly they want more of the
results to come out before they declare victory. anna: they are so happy behind you i understand they have been in ut. george osborne saying that clearly the torres have a mandate so we have yet to hear at downing street from the prime minister but that is what george osborne has been saying. ryan, thank you for now. quickly back to john, apologies our conversation keeps being interrupted. briefly, your thoughts on interest rates. are we going to see fiscal holocene tighter than the markets expected? then interest rates -- >> in the short-term this is continuity they will mainly determined by what is going on in the underlying british economy about what goes on in the states and china.
but for the markets, i think the main changes will come in the areas which are relieved. housing and the mansion tax kensington, non-dom, the shires versus the inner-city who can expect a bit more of public spending and on the other side george osborne will now have to deliver his spending cuts because he has tied himself down to no tax increases. so where will you find them? anna: in the run to the election, the parties perhaps thought they would not get majorities. so where's this -- there was this flurry of gifting and a lot of the parties thought we will not have to deliver this and now we end up perhaps with a conservative majority. so good to see you and i'm sorry
we do not have longer to speak but there is plenty going on. a former bank of england policy maker uppity at the bank of england. david cameron is said to keep power. let's take a look at how the markets have responded. michael houston, chief market analyst patiently waiting to join us. good morning to you. not the morning you were expecting. >> certainly not. when that exit poll came out yesterday i nearly fell off of my chair as i didn't think anyone was expecting the conservatives to come in with 316 votes. i think you will see the results of that this morning in a massive relief rally in the footsie. anna: we were just talking to john of the bank of england and he was cautioning that yes we might see this bounce and this pro-market euphoria to start with, but how long will it last
when does the market start turn attention to europe. certain look at this government and how eurosceptic it might be compared to the last one. >> i think that is a very key point. what you will see today is a relief rally and it is largely a result of the fact that the labour party have not got in. we will not see the price freezes and the potential nationalization of the rail franchises and we will see the energy caps. we will not to the worst parts of the labour manifesto. three days ago a lot of people were thinking that ed miliband would be prime minister. in terms of the stocks we could gains in we could be looking at the stocks for stagecoach go-ahead looking at scotch and southern and the banks as well because the labour party were going to impose not only a mansion tax but another banking bonus tax. a significant relief on the
footsie today and there is a small point to mention out of china, very disappointing trade numbers. we could get further easing out of the central bank which could push the numbers higher as well. anna: i can almost hear the private jets powering up as we speak. in terms of the individual stocks you mentioned some of those that could be on the move. manus is talking about analysis bloomberg has done about which parts tend to benefit and of course it is the smaller and mid-cap stocks that tend to benefit in the wake of an election result because they are moved by policy. >> i mentioned some of them just now. i think the house builders would've got a boost whoever got in and let's not forget that the 5250 has outperformed the ftse 100 by the term of this last coalition government. i don't think that will change going forward. i think the key question now is
the slowdown that we saw coming into the boat, particularly in the manufacturing sector and the construction sector, do we get a rebound as we come out the other side? i think that is a key point that i will be looking at going forward. anna: one thing that was interesting from my conversation earlier on talking about how international investors will look at the u.k. going on. on the one hand we have this clearer political direction but a very strong drop between the politics in the united kingdom and scotland. a bit axis and perhaps in very difficult for international investors to get involved with all of that. does that put them off? >> i don't think it will. we know that we will have some form of brexit between now and 2017. first and foremost it depends on the question but i think mr.
cameron has more important problems in the interim. i think he is actually getting a government committed to keeping the union together. you talked about the scottish national party coming in with 58 seats. how will his relationship evolve with alice. because nicola sturgeon will not be affected. i think part of the result we are seeing today is not just -- it is really just about the economy more than anything else. i certainly don't think it is a vote of confidence" the conservatives, it is more an antilabor vote than anything else. anna: what about the pound? 100 -- 1.5423 staging a strong bounce this morning. how long does that last? >> i actually think that is more of a u.s. dollar story. i think the movement in the dollar rate will affect the
pound more than what will be happening here, certainly in the short term. i think the dollar has further room to fall and we could well see a move through 155 toward 160. simply because it is very unlikely that we will see a fed rate rise anytime this year. anna: thank you, michael houston the chief market analyst. we continue to tally the results of the election. you are looking at live pictures where david cameron has just arrived and it looks as if he is set to stay there. not the result we were expecting.
anna: welcome back to "bloomberg politics." the world's largest seed company monsanto has made a $45 billion offer for. they are said to have rejected the offer which would resent a 30% premium on its last closing price. that opens the door for them to make another offer. more evidence overnight of their economic slowdown. overseas shipments fell six percent from a year earlier while imports slid. the fourth straight double-digit
decline. u.s. payrolls expected to show that the largest economy added 230,000 jobs in april which follows an increase of 126,000 in march. a billionaire attracted investors from singapore, canada and the united arab emirates to fund 2.5 billion pounds to go to acquisition and create the largest wireless carrier in the u.k.. they agreed to pay 2.5 billion pounds for a third u.k. wireless victory. let's focus on the market story. 6.5 minutes to go until the u.k. equity markets open so let's get to manus cranny who has his finger on the market pulse. manus: equities are roaring
ahead. it is ripping ahead in terms of how it is positioned against the dollar. the biggest one-day moves since 2009. volatility in the currency is decreasing as traders begin to change. we did make it above 155 earlier. the biggest one-day move since 2011 in sterling. i think the equity markets -- let's have a look at some of the key market. you have in play the guilt market. you see the resurgence of bonds. long futures up 46 points. the yield is declining on that. footsie up 1.6%. the short sterling contracts have not really moved.
john reith said the unexpected disappearance of uncertainty opus on the short-term interest rate risk. what is back to the bond market question is will there be a renewed interest in buyers and we saw that coming back to a certain extent. today's trade will be in the equity markets because there will be no mansion packs. no rent control or rent cap. the banks will be in focus. lloyds is the agenda as far as the city is concerned. when will the government go to sell more of lloyds? rbs will also be there. we'll keep an eye on the banks. and at the top of the show, we'll have an elaborate circle. the most shorted stocks going into general election 2015.
sterling and equity markets on a roar. anna: manus cranny with the latest on the markets. let's have a look at some live pictures tracking them across london this morning. the party leaders try to find their positions for the rest of the day. david cameron and his wife arrived back just minutes ago. george osborne with the chancellor and the previous government talking about the same time how this is been a great night for the conservatives and how to have a mandate to govern areas we have not heard david cameron using those words. he did speak after his victory and oxfordshire about the strong night for the conservatives. he said at that time it was too early to see what the results would be. the exit polls are getting better and better. the last ones we saw both said that the conservative party
anna: sterling rallies and surgeons in a six-year high against the euro. uses concerned that drawn out negotiations will be needed in the next u.k. government. david cameron is set up to be the next prime minister. he pulls off an election surprise. anna: labor takes a hammering and scotland. the s&p -- as bank is on track to become the third largest party in parliament. >> european markets are just
opening. we need to talk about equity markets we need to check in and see what the calls are. manus cranny is that the touchscreen. manus: equity markets are the focus. we are one second away from the opening train -- trade. the next issue for the equity markets is breaks that -- brexit could this bring back the nerves of 1992? michael o'sullivan it with here and he says this was beyond the dreams of this sitting minister, which is the prime minister. bt group up.